International Economics - The Final Quiz - Part 2

9 Questions | Total Attempts: 50

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Economics Quizzes & Trivia

Questions and Answers
  • 1. 
    If in a 2 products-2 country word, a country has an absolute disadvantage vis-a-vis the another country, opening to trade will decrease its average productivity.
    • A. 

      True

    • B. 

      False

  • 2. 
    Two countries, the Kingdom of Lesotho (L), and the Union of Comoros (C), work in a perfect "Ricardian model", producing two goods: Oil (O), and Bread (B). Knowing that: . the two countries are open to trade. . there is no mark-up between the TC and the price of the goods. . The production possibility frontier of Lesotho is (express in unit of bread and unit of oil): B = -0.5*O + 1000 . Lesotho has a workforce equal to 200 workers. . The production possibility frontier of Comoros is: B = -2*O + 750 . Comoros has a workforce equal to 300 workers. . The international price of oil is equal to 1$ per unit of bread. What is the level of wage in the two countries?
    • A. 

      Lesotho: 5$/unit produced, Comoros: 2.5$/unit produced

    • B. 

      Lesotho: 10$/unit produced, Comoros: 5$/unit produced

    • C. 

      Lesotho: 10$/unit produced, Comoros cannot be determined

    • D. 

      The two countries have the same level of wage equal to 5$/unit produced

    • E. 

      There are not enough data to answer

  • 3. 
    Which of these factor does NOT depend on the indifference curve of the demand, in the Ricardian model?
    • A. 

      The Gain from Trade of the country

    • B. 

      The international price

    • C. 

      The amount of Exportation and Importation of the country

    • D. 

      The sector in which the country shall specialize

    • E. 

      A + D

  • 4. 
    Two coutnries, Comm (C), and Unity (U), work in a Ricardian model, and have recorded these data:                                 ac         au [worker-hour for prduce one unit] (A) Antennas        10         15 (C) Cars                 23         20 (M) Microchips      0.5        1 (X) Xylophone       1           0.6 (Y) Yatch                240      120 and the level of wage is 26$/worker-hour for C, and 22$/worker-hour in U. In which sector C has a comparative advantage?
    • A. 

      C and Y

    • B. 

      A, C, and M

    • C. 

      A and M

    • D. 

      A and X

    • E. 

      In none of them.

  • 5. 
    Divide the following assumption in the right group: R --> Ricardian model assumtpion, HO --> Hesker-Olin model assumption. 1. Identical Technologeis through countries. 2. Perfect Competition. 3. Perfect mobility of factor across countries. 4. Constant return to scale.
    • A. 

      R: 1,3; HO: 2,4

    • B. 

      R: 2; HO: 1,4

    • C. 

      R: 2,4; HO: 1,2,4

    • D. 

      R: 1,2,4; HO: 2,3,4

  • 6. 
    If along an isoquant of production Q(K,L), the point X1 has K/L higher than the point X2, it is true to say that increase the capital used of one unit in X1 will imply a deltaL higher (in absolute terms) than in X2.
    • A. 

      True

    • B. 

      False

  • 7. 
    A country has a production possibility frontier, referring to the product C (capital intensive) and F (labor intensive), shown in the image. Given that the country have more unit of Labor than Capital, it is true to say that the country has a comparative advantage in F.
    • A. 

      True

    • B. 

      False

    • C. 

      There are not enough data to answer

  • 8. 
    A firm in Italy use two factors to operate: capital and labor. These data are give: Cost of an additional unit of labor: 12€ Cost of an additional unit of capital: 35€ MPL: 142 MPK: 368 What is your suggestion for the company?
    • A. 

      The company should increase the Labor used, in order to reach the equilibrium

    • B. 

      The company should increase the Capital used, in order to reach the equilibrium

    • C. 

      The company is in the equilibrium

    • D. 

      There are not enough data to answer

  • 9. 
    C and F are two goods, capital and labor intensive. It is possible to produce, with the same amount of K and L, both a specific quantity of C and a specific quantity of F? (That is, is possible to select a combination (K,L) that allow the production of both C and F, in different quantities?)
    • A. 

      Yes

    • B. 

      No

    • C. 

      Boh

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